“Mr. Hanniman submits that it is unfair to allow double recovery by way of continued spousal support payments to Ms. Hanniman, drawn on his share of his pension income, when she has already received her half of that pension.
In Boston, the Supreme Court of Canada defined double recovery as follows:
The term “double recovery” is used to describe the situation where a pension, once equalized as property, is also treated as income from which the pension-holding spouse (here the husband) must make spousal support payments. Expressed another way, upon marriage dissolution the payee spouse (here the wife) receives assets and an equalization payment that take into account the capital value of the husband’s future pension income. If she later shares in the pension income as spousal support when the pension is in play after the husband has retired, the wife can be said to be recovering twice from the pension: first at the time of the equalization of assets and again as support from the pension income (at para. 34).
As a general rule, double recovery should be avoided where possible. As the Court stated in Boston, it is generally unfair to allow the payee spouse to reap the benefit of the pension both as an asset and as a source of income. To avoid double recovery, the court should, where practicable, focus on that portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee’s continuing need for support is shown (paras. 63-64).
However, the Supreme Court of Canada also acknowledged that double recovery cannot always be avoided and may be permitted in limited circumstances:
Despite these general rules, double recovery cannot always be avoided. In certain circumstances, a pension which has previously been equalized can also be viewed as a maintenance asset. Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists. Double recovery may also be permitted in spousal support orders/agreements based mainly on need as opposed to compensation … (Boston, at para. 65).”